Purpose

To provide state funds to help counties, municipalities, and townships plan and support the creation or expansion of regional drinking water systems, and to report on progress and future funding needs.

What the bill would do

• Establish grant program to assist local governments in planning and organizing regional drinking water systems under Minnesota law (chapter 116A).
• Use grants to cover planning and analysis activities needed to form or enlarge regional water districts, not for building new facilities directly.
• Create a one-time state appropriation to fund these planning grants and require reporting on outcomes.

Eligible recipients and eligible expenses

• Eligible recipients: counties, municipalities, and townships that want to pursue regional drinking water projects under Minnesota Statutes chapter 116A.
• Eligible expenses: planning-related work such as feasibility studies, engineering analyses, legal and financial assessments, community engagement, preliminary and final design work, and any activities needed to form a regional district under Chapter 116A.

Grant administration and priorities

• By November 1, 2026, the commissioner of health must develop:
  • An application process, and
  • Selection criteria that prioritize projects dealing with aging water infrastructure, water quality, affordability, or economic development.
• Grant maximum and match:
  • Each grant cannot exceed $300,000 per recipient per year.
  • Recipients must provide at least 25% of the grant amount as a matching contribution.
• Reporting requirement:
  • By January 15, 2027, the commissioner must report to the chairs and ranking minority members of the legislative committees with jurisdiction over water infrastructure. The report should include the grants awarded, progress of funded projects, and recommendations for future funding to support drinking water regionalization.

Funding and appropriation

• Appropriation: $1,000,000 in fiscal year 2027 from the general fund to the commissioner of health to provide grants for drinking water regionalization planning to counties, municipalities, and townships.
• Nature of funding: one-time appropriation.
• Duration: funds available until June 30, 2027.

Significance and potential impact

• Supports local-government-led regionalization efforts by funding planning and district-formation activities.
• Encourages consolidation or cooperation among local water systems to improve aging infrastructure, water quality, and affordability.
• Introduces state-level criteria to direct funding toward projects with broader community and economic benefits.

Notable changes to existing law

• Creates a dedicated, time-limited grant program and funding stream specifically for drinking water regionalization planning (under the framework of existing statutes on regional districts).
• Establishes an upfront state role in prioritizing and evaluating regionalization efforts and requires formal reporting on outcomes.

Relevant Terms drinking water regionalization, regional drinking water systems, planning grants, feasibility studies, engineering analyses, legal and financial assessments, community engagement, preliminary and final design, district formation, Minnesota Statutes chapter 116A, aging infrastructure, water quality, affordability, economic development, grant maximum, matching funds, reporting, commissioner of health, general fund, appropriation, counties, municipalities, townships, one-time appropriation, fiscal year 2027.